Tribunal accepts BCCI’s plea for insolvency proceedings against Byju’s

BCCI Logo and Byjus Logo. (Photo Source: Twitter)

The National Company Law Tribunal (NCLT) has admitted the Board of Control for Cricket in India’s (BCCI) petition seeking insolvency proceedings against ed-tech giant Byju’s. The case revolves around alleged unpaid dues of INR 158 crore related to the sponsorship of the Indian cricket team.

The dispute dates back to September 2023, when the BCCI applied with the Bengaluru bench of NCLT against Byju’s parent Think & Learn Pvt Ltd. The cricket board claimed that Byju’s had defaulted on payments for sponsorship rights of the Indian cricket team.

The NCLT bench, in its order, stated that Byju’s had availed BCCI’s services through sponsorship rights, and there was clear evidence of an outstanding debt. The tribunal examined a trail of emails between the two parties, which established the existence of the debt and subsequent defaults.

“It is stated that the General notice was issued to Byju’s email dated 06.01.2023 and the default amount of ₹158 crore, excluding TDS (tax deducted at source) as reflected in the invoices attached,” the order read.

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Byju’s attempted to dismiss the application

The case involves 12 invoices raised by BCCI for various international tours and series played by the team. The first default occurred on August 21, 2022, when 50% of the amount was due. Despite Byju’s allowing BCCI to encash a bank guarantee of INR 143 crore in January 2023, the outstanding amount still stands at INR 158.9 crore.

The then sponsor attempted to dismiss the application, arguing that their agreement with BCCI had lapsed on March 31, 2022. However, the tribunal concluded that the continued raising of invoices indicated that the company was still availing BCCI’s services even after the agreement’s expiration.

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In a separate development, Byju’s application for arbitration, filed in January 2024, was rejected by the tribunal. Furthermore, the tribunal stated that in insolvency matters, it must either admit or dismiss the petition, and such cases are not subject to arbitration.